Tuesday, January 15, 2019

What To Expect From A New Business Person

There are several common mistakes made by companies hiring business development executives.  Their most common error is not defining the job properly. And by doing so, the company often sets up unrealistic expectations causing the new business person to fail. (Of course, the company blames their failure on the executive.)

Defining the job
The first thing a company must do is to determine what kind of person they need.  It is critical to the success of the endeavor and to the person who is hired.  Companies must be introspective and realistic about their needs and expectations. 

There are many kinds of business development people.  There are cold callers who are primarily responsible for making the initial contact with prospects.  There are many people who are not necessarily cold callers, but they are most effective at going to meet potential clients at trade shows and events; these people are often at their best once a prospect has been introduced to their company.  There are specialists in organizing and orchestrating the actual presentation(s) to possible clients.  And there are strategists who can determine what potential clients need and determine how this information should be presented.  There are executives who can do it all, but they are rare (and often expensive).

I have met many new business directors who are great strategists but poor cold callers, but their job is wrongly defined by how many future clients they bring into the agency or company.

Setting expectations
Successful business development often takes months or years.  First, contact has to be made.  It could often be several years before a client is ready to look for a new agency or other supplier. Establishing contact and developing a relationship may take months or years.  Surprisingly, many ad agencies and other marketing companies hire without thinking through this issue.

Expecting a development person to be successful (however defined) within three or six months, or even a year, is unrealistic.  After all, why should a biz dev person be able to do what the agency or company ownership or management cannot do?  It is a common mistake for an agency principal to assume that a sales person can speed up the process.

Successful business development people must be part of management.  This enables them to know firsthand exactly what the agency wants and needs.  It also allows them to deal with clients at an executive level rather than being seen as a hired gun.

Expecting a junior, non-management person to be able to effectively operate and fully complete the process is unrealistic.

Assessing Results
I know one new business person who took a job at a small, well known creative agency.  The agency was only interested in major accounts (or parts of them) – IBM, Mondelez, P&G, etc.  Those expectations were totally unrealistic given the size, history and background of its principals.  The business development person left quickly because she realized that she could never be successful at that agency.  Unfortunately, when the NB person was hired, she was never told about expectations.

I met a famous new business person who left a highly successful and creative ad agency because the agency rejected almost every company he approached.  For them, the work they had previously done was never good enough. They only wanted clients who they believed (rightly or wrongly) would approve exceptional creative work, but they neglected to tell the development person from the onset of his employment about the kinds of clients it wanted.

Expectations must be realistic.  If the agency’s (or company’s) tools (case histories, presentations, etc.) are non-existent or out of date, it could take months to get them organized, agreed upon and updated.  That time should not be held against the development person and, while their job may be to bring in prospects, they must have the tools (and resources) necessary to pitch once a potential client is identified.  It would be awful to have a prospect come in and not be prepared.

The criteria for determining success should be agreed to by all parties, including the potential new business person prior to their being hired. Among the many questions,  should a development person be judged on the number of contacts he or she makes each month or each quarter?  Should that person be judged on the number RFP’s the completes or should they be evaluated by the number of actual presentations made to clients?   Many development people are graded by income their prospects generate, even though many clients actually exaggerate their spending or underestimate the amount of time required to service them.  All of these things should be considered and agreed to.

Pay must be realistic for the job.  People who can deal with prospect executives will cost more than a cold caller who just makes introductions. 

Everyone needs a fair base salary.  One company said to me, “If she is so good, and she believes in herself, she should be willing to work only on commission. She will be making big money quickly.” Wrong.  Everyone needs to be paid for work, no matter how high the subsequent commission.  And, from the time an agency is hired until the time revenue starts coming in may be many, many months.

I have written that biz dev people should be paid a good salary rather than any form of commission.  They may get a good bonus at the end of the year, but there are too many pitfalls and questions with commission payments.

One of the worst examples was a successful EVP who was asked by the agency management to drop everything for six months and work on a major pitch.  The agency landed the account but did not want to give the biz dev person his normal commission since he was not responsible for the initial contact, despite running the pitch.

Tuesday, January 8, 2019

Adventures In Advertising: The Best Out Of Town Client Visit

Years ago I was a partner at an ad agency.  I had two partners; we were all great friends.  Ironically, and by sheer coincidence, we had two clients in Texas.  Alcon Labs in Ft. Worth and Houston City Magazine in Houston.

My client from Alcon called me and asked if I would come down for a meeting. The call came on a Monday and I was asked if I would come to Ft. Worth on Thursday night for a Friday meeting and my client and I made a dinner date for Thursday evening in Dallas at the revolving restaurant on top of the Hyatt.  Dinner was scheduled around my flight and was to be at about 7:15.  The reservation was in the client’s name.

So a little before the scheduled time I went up to the restaurant.  They seated me immediately.  At 7:15, no client.  At 7:30 no client.  By 7:45, no client and I was concerned.  But it was before cell phones.  I called the client’s office and got his voicemail.  I called through the switchboard and they could not reach him.  I had absolutely no idea what to do since I didn’t have his home number and, frankly, didn’t even know where he lived. He had a common name and I looked in several available phone books (remember them?), but there was no one with his first name.  I didn't quite know what to do, so I decided to go back to my table, ordered a drink and waited.

At 8pm I looked up and, to my great surprise, there was my client from Houston.  Paula was the ad manager of Houston Magazine and, frankly, a date for me when I was down there (I was single).

I asked her what she was doing there.  She burst out laughing.  It had all been a set up by my partners and was a wonderful practical joke.  The purpose of which was to give me some rest and to have a great weekend in Dallas.  The Alcon client was in on it.

When I called him Friday morning to see if we actually had a meeting, he laughed and asked me how my dinner was.  Of course, he told me that if I wanted to see him, I could.  I laughed and politely declined.  I changed my flights and Paula and I had a wonderful three day weekend.

I did break one of my cardinal rule by dating a client, but she was in Texas  and I was in New York, so I rationalized it as a once in a while thing.. I called my partners and thanked them. We all laughed,  I ended up having a great weekend.

It was one of the best business practical jokes, ever.

Tuesday, December 18, 2018

Why Internet Recruiting Doesn’t Work Efficiently

No question that many companies, perhaps even most, have turned to electronic recruiting, especially for mid-level and junior employees. Subscribing to the various recruiting sites is relatively inexpensive (as compared to paying a recruiter) and for very little money when there is an opening, a company can receive dozens of résumés.

There are many recruiting sites on the internet.  Some are more sophisticated than others, some are more expensive than others. Some are actually better than others. In the final analysis, they are all only as good as their input allows.  And, among other things, therein lies the problem.  Companies don’t know how to prepare proper job specs (in most cases, they write job descriptions which are not actually specs for who they want to hire; they are rally only top-line explanations of the job), electronic recruiting ultimately finds candidates who match those insufficient job specs.  They save money for companies, but ultimately and can only send résumés; some appropriate, most not. They all lack one thing – interviewing and the ability to actually qualify candidates by personality.  

A few years ago, at its height, one of the first and largest internet recruiting companies was trying to sell me their service.  After months of turning them down, a representative volunteered to come to my office and show me how to use the site.  He was going to conduct actual searches with me at no charge.  He spent an hour and a half with me.  We chose several different jobs – all in advertising at different levels. 

We did searches for all kinds of titles, experiences (such as they had) and even current companies (there are thousands of advertising agencies, but we inputted the twenty or so largest and then tried several smaller agencies where I thought that likely candidates might come from).  Guess what?  Nothing.  Nada. Bupkis.  In each search a couple of names came up.  Few were appropriate, although a couple of names showed up who I already knew. The representative expressed shock at their inability to be able to give me appropriate candidates because, after all, their data base had hundreds of thousands of names.  He promised to look into the issue and get back to me.  I never heard from him or them again. 

We did come up with one or two people who seemed appropriate for my practice, but when I contacted them (through their web site), I got no response. Now candidates complain about companies not calling them back or responding to submitted résumés. Recruiters who contact candidates have the same problem whether through job websites or simply by calling or emailing directly.  All recruiters will tell you that many candidates do not return calls or even emails, which is something I have never understood.  And that problem is getting worse.  As companies have eschewed recruiters, younger candidates actually don’t know what a recruiter does or can do for them because there is no exposure for them to the use of search people. So, as a result, they don’t return calls or emails.

But I digress.

The point is that the logarithms that the recruitment sites have are just not sensitive enough to show companies their skills or what they can actually accomplish.  When every good recruiter gets an assignment, they can ask questions about the job and about the intangible attributes that the position requires.  Hearing the nuances of an assignment can make a significant contribution to the ability to find the right candidate.  Those distinctions, so far, just are not available from the online sites which provide volume over quality.

There is no substitute for interviewing and knowing candidates.  The whole purpose of paying a recruiter is to save money for a company by efficiently recruiting.  In essence, a good recruiter who receives or who can determine who a company wants to hire can actually save them money by doing the interviewing for them.  No question that many recruiters are what I call “senders” and don’t do much more than the internet web sites.  Single industry recruiters, like me, have large data bases of qualified candidates.  They know the companies as well.


Tuesday, December 11, 2018

Why You Can No Longer Count On Severance Pay If You Are Let Go

There have been many changes in the advertising business over the last twenty years.  One of those changes is the frequency with which agencies fire employees and the amount of severance which is given along with those terminations.

There is no law that requires a company to pay severance if an employee is terminated.  Severance is actually based on an agreement between employer and employee; in the absence of an agreement, payment is purely discretionary on the part of the company.  Contrary to popular belief, there is no rule or regulation that requires severance to be paid to any employee who is terminated, no matter how long they have been with the company. 

Once upon a time in advertising, most agencies adopted a policy of paying a set amount of termination pay.  As I recall, many agencies paid a minimum of one or two week’s salary for anyone being terminated, even if they had been at the company less than a year (unless they were fired for cause).  For longer-term employees the policy at most agencies was anywhere from one or two weeks to a month’s salary for each year of employment.  Many agencies also paid for unused vacation time (based on a year) and some period of healthcare. Today ad agencies fire employees with such frequency that many actually give little or no severance and don’t pay for unused vacation or healthcare. It doesn’t matter how long someone has been employed by the company.  To me this is particularly distressing since many terminations are due to loss of business, which may not be the employee's fault.

I have interviewed people who have been with an ad agency for fifteen or twenty years, who are now late in their careers, who were terminated through no fault of their own (usually because of an account loss). Many receive only a few weeks’ pay, if that. And those loyal and long-term employees are often required to leave the building with little or no notice. There are many reasons why this happens, but one of them is that by having an employee leave immediately, it prevents the departing employee from being able to walk into human resources and demand more departure benefits. Once an employee is out of the office, they have to make an appointment in order to get back in to negotiate.  I have actually heard of companies who have refused that request.  In one case a company made an appointment with a former employee and made him wait in the reception area for over two hours - how humiliating.  This person had worked at the agency for more than a dozen years.

While few agencies offer formal employment contracts even to senior employees, offer letters are binding.  It is important that severance pay be spelled out in an offer letter prior to starting work.  If a company has a termination pay policy (many actually do), that policy should be listed in the offer letter.  Companies frequently change policy, but at a minimum, a candidate should be able to rely on the rules that were in effect at the time of employment.

In most of the United States (except Puerto Rico) nearly all executive employees are “at will” which means they can be terminated for any reason or no reason without repercussions to the employer.
I can think of one agency which does give severance, but requires that departing employees must sign an exit agreement.  That agreement stipulates that if the agreement is discussed with any outside party, including legal counsel and family (!), further payments will be suspended.  This is of dubious legality, since coercion is illegal, but certainly by forcing someone to sign an agreement under threat is intimidating for 90% of people who are fired; most people need (and deserve) the financial cushion.

Some time ago I wrote about the long-term employee who was terminated without the knowledge of her agency president.  She was lucky enough to have a relationship with the president and was able to negotiate a far better exit package directly with him.  This is rare since, in most cases, the manager who fires an employee or the HR person are not empowered to make changes to severance is not compensation.

The best protection any employee can have is to have significant savings since severance is not required and cannot be counted upon. And, in my observation, most of the network owned agencies have very limited payment policies, even for their senior people.

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